Silver Hits 14-Year High as Dollar Weakens and Retail Demand Surges

by Donnie Dauria

LONDON  - Silver prices climbed sharply in European trading on Monday, extending their winning streak to a third straight session and breaking above $47 per ounce for the first time since 2011. The rally underscores the white metal’s resurgence as investors bet on its relative value against gold amid a weakening U.S. dollar.

Price Momentum Builds

  • Spot silver advanced 2.45% to $47.19 per ounce, its highest level since May 2011, after opening the session at $46.07 and dipping briefly to a low of $45.95.

  • The move follows Friday’s 1.95% gain, silver’s second consecutive daily rise, buoyed by revised U.S. consumer inflation figures.

  • Over the past week, silver surged nearly 7%, marking a sixth straight weekly advance, as demand for the metal strengthened across physical and investment channels.

Dollar Weakness Lifts Metals

The U.S. dollar index fell another 0.3% on Monday, extending losses after pulling back from a three-week high of 98.61. A softer dollar typically benefits dollar-denominated commodities such as silver, making them cheaper for foreign buyers.

The greenback has been under pressure from a combination of profit-taking, persistent concerns about a potential U.S. government shutdown, and mounting expectations that the Federal Reserve could deliver interest-rate cuts in October and December.

Markets are watching this week’s slate of U.S. labor-market data and upcoming Fed commentary for fresh clues on the policy outlook - developments that could further sway the dollar and, by extension, precious-metals pricing.

Retail Investors Step In

While institutional demand has long been a pillar of the precious-metals market, retail investors are increasingly emerging as a driving force behind silver’s latest rally. Many view silver as undervalued compared with gold, which has continued setting record highs this year.

The recent price surge highlights a growing recognition among individual investors that silver’s historical gold-to-silver ratio suggests significant room for upside. As global monetary policy trends toward a more accommodative stance, retail traders are turning to silver as a hedge against inflation and currency risk - fueling a wave of new buying interest.

Outlook

Silver’s breakout above the $47 threshold - a level unseen in 14 years - is being closely watched by traders and analysts alike. Sustained weakness in the U.S. dollar, coupled with further evidence of robust retail demand, could set the stage for continued gains.

For now, the market’s attention remains fixed on upcoming U.S. economic reports and central-bank guidance, which will help determine whether silver’s rally has the momentum to challenge its all-time highs.

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